Pay Transparency Laws

What Are Pay Transparency Laws?

Pay transparency laws are regulations that require employers to disclose compensation information—such as salary ranges, bonus eligibility, or pay equity data—to job candidates, employees, or the public.

These laws are designed to:

• Promote pay equity and reduce wage gaps
• Provide job seekers with clear compensation expectations
• Hold employers accountable for fair pay practices
• Protect employees who discuss or inquire about pay

In the U.S., pay transparency laws are rapidly expanding at the state and city level (e.g., California, Colorado, New York, and Washington), with international counterparts in countries like the U.K., Germany, and Canada.

What Pay Transparency Laws Typically Require

Salary Ranges in Job Postings

Employers must include minimum and maximum pay ranges in job ads—even before a candidate applies.

Disclosure Upon Request

Employees and candidates may have the right to request pay ranges for their role or prospective role.

Pay History Restrictions

Many laws prohibit employers from asking about a candidate’s salary history to prevent past pay inequity from carrying forward.

Internal Equity Reporting

Some jurisdictions require large employers to publish gender or race-based pay gap reports or submit them to regulatory bodies.

Why Pay Transparency Laws Matter

Drives Pay Equity

Transparency helps expose and correct unjustified pay disparities across gender, race, and other groups.

Improves Candidate Experience

Job seekers are more likely to trust and engage with employers who are upfront about compensation.

Strengthens Employer Branding

Companies with clear and fair pay practices stand out in competitive talent markets.

Reduces Legal and Compliance Risk

Failure to comply can result in fines, audits, or reputational damage.

States with Pay Transparency Requirements (as of 2025)

• California – Salary ranges required in job postings for employers with 15+ employees
• Colorado – One of the most comprehensive laws, requiring range, benefits, and promotion disclosure
• New York (State + City) – Requires pay ranges in job postings
• Washington – Similar to CA, with added requirements for internal transfers
• Connecticut, Maryland, Nevada, Rhode Island – Require salary range disclosure at various stages of hiring

Note: Laws vary in scope and penalties. Employers should stay up-to-date with local regulations, especially if hiring remotely across multiple states.

Common Challenges for Employers

Inconsistent Pay Practices

Lack of internal pay bands makes it difficult to disclose ranges confidently and consistently.

Worried Managers and HR Teams

Concerns around employee comparisons or morale when ranges are made public.

Technology Limitations

HR systems may not be equipped to automate or track salary range disclosures.

Legal Uncertainty

With laws evolving quickly, companies struggle to stay compliant across jurisdictions.

Best Practices for Pay Transparency Compliance

Build and Maintain Internal Pay Bands

• Define clear salary ranges for all roles and levels
• Align with market data and your compensation philosophy

Centralize Compensation Data

• Use platforms like CandorIQ to store, manage, and surface pay ranges consistently across hiring and HR teams

Train Managers on Communication

• Help leaders explain pay decisions, address questions, and support transparency without oversharing

Audit for Equity Regularly

• Review pay across gender, race, and level to ensure transparency doesn’t reveal unintentional inequities

Pay Transparency Laws vs. Pay Equity Audits

While pay transparency laws focus on disclosure, pay equity audits focus on internal fairness. Both are essential for building a responsible, modern compensation strategy.

Pay Transparency Laws

• Focus on disclosure
• Required by law in many jurisdictions
• Aimed at job candidates and employees
• Public-facing compliance

Pay Equity Audits

• Focus on internal fairness
• Often voluntary but highly recommended
• Conducted by HR/Legal teams
• Internal data review and correction

The Bottom Line

Pay transparency laws are reshaping the future of work. Companies that embrace transparency—not just as a legal requirement, but as a cultural value—can reduce risk, improve retention, and attract top talent. The key is having the right data, systems, and strategy in place to support compliance and fairness at scale.